Interior Department Awards First Ever Offshore Wind Leases

The U.S. Interior Department awarded the first-ever exploratory leases for offshore wind power development off the coasts of New Jersey and Delaware.

Interior Secretary Ken Salazar announced five leases for three companies: New Jersey-based Deepwater Wind LLC; two units of Babcock & Brown’s Bluewater Wind LLC; and New Jersey-based Fishermen’s Energy of New Jersey LLC.

“We are entering a new day for energy production in the United States – a time of clean energy from renewable domestic sources on our Outer Continental Shelf,” Secretary Salazar said.

The leases were developed under an Interim Policy and authorize data gathering activities, allowing for the construction of meteorological towers on the Outer Continental Shelf from six to 18 miles offshore to collect site-specific data on wind speed, intensity, and direction.

The data collected under these leases will determine the viability of proposed wind farms in these locations and will be shared with Interior’s Minerals Management Service and used to inform and support future commercial renewable energy projects, such as wind turbine farms, to help coastal States meet mandated renewable energy portfolio standards.

Interior negotiated a breakthrough agreement with the Federal Energy Regulatory Commission on April 9 that clarified the jurisdictional responsibilities for leasing and licensing renewable energy projects. The President and the Secretary announced the final comprehensive framework on Earth Day, April 22, and it becomes effective on June 29.

The framework provides the “rules of the road” for states and companies with renewable energy initiatives to pursue projects on federal submerged lands as well as methods for sharing 27.5% of the revenues generated from these projects with adjacent coastal States.

New Jersey is actively pursing the development of offshore wind energy through various state initiatives (e.g., grant solicitations, reimbursement programs, and renewable energy portfolio standards). In October 2008, the New Jersey Board of Public Utilities established a meteorological tower reimbursement program, which provides $4 million per company to help expedite the development of offshore wind.

In Delaware, Delmarva Power signed a power purchase agreement with Bluewater Wind for up to 200 megawatts (MW) of offshore wind power.